BellSouth this week posted a 12% hike in second-quarter earnings on growth in broadband and wireless.
For the second quarter of 2006, BellSouth recorded revenue from continuing operations of $5.2 billion, up 1.2% compared to the same quarter of 2005. Income from continuing operations was $887 million.
In the second quarter of 2006, BellSouth’s Communications Group revenues were $4.7 billion, a 1.0% increase over the second quarter of 2005. Growth in the mass market and stabilization in the large business customer segments contributed to the improved results. Revenue streams for broadband data and long distance in these segments outpaced declines in the traditional voice business, BellSouth said.
Network data revenues grew to $1.3 billion, a 10% increase over the second quarter of 2005. Retail data revenue growth of 18.7% year-over-year was driven by a 40.9% increase in retail DSL revenues and “continued momentum from emerging retail data services indicative of market growth in IP broadband services,” the carrier said.
BellSouth added 128,000 DSL customers in the second quarter, raising its total to nearly 3.3 million subscribers.
Cingular Wireless, of which BellSouth owns 40%, added 1.5 million net new customers during the second quarter of 2006 and served a total of 57.3 million subscribers at the end of June. Overall monthly subscriber churn for the quarter was a record-low 1.7%, BellSouth said.
In the second quarter of 2006, Cingular’s revenues were $9.2 billion, an improvement of 7.1% over the same quarter a year ago and up 2.7% sequentially. Average revenue per user improved sequentially in the quarter to $48.84, but declined 3.3% from the year-ago second quarter.
Capital expenditures for the quarter were $950 million, including approximately $130 million of incremental expenditures for Hurricane Katrina restoration efforts. Since the third quarter of 2005, BellSouth has incurred approximately $910 million for Katrina-related network restoration expense and capital spending.
BellSouth expects its impending merger with AT&T to close in the fall. Last Friday, shareholders of both BellSouth and AT&T voted to approve the merger agreement. The companies have also made “significant progress” toward obtaining the regulatory approvals from the Department of Justice, the Federal Communications Commission and various state commissions, BellSouth says.
A U.S. judge, however, is scrutinizing two previous mergers — SBC’s acquisition of AT&T and Verizon’s purchase of MCI — to determine if they serve the public interest or create an uncompetitive environment. U.S. District Judge Emmet Sullivan Tuesday requested additional documentation before deciding whether to schedule a hearing on the mergers, according to published reports.
